7 Red Flags of a Struggling Procurement Team

Last week on the Procurement Leaders Playbook, we discussed ethics in procurement and 5 ways to deal with it.?

This week, we’re diving into 7 red flags for struggling teams (and later 7 strategies to move towards becoming more strategic):

Many so-called procurement teams are in fact, ‘Getters’. Meaning a group of people that ‘gets’ stuff, not strategic buyers. Knowing these 7 red flags and avoiding them is key to becoming a strategic buyer instead of a “getter”.?

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Red Flag 1. Lack of Clear Strategy:

When objectives are unclear or constantly changing, it can hinder the team's direction and impact decision-making, leading to inefficiencies in procurement processes.

Red Flag 2. Poor Supplier Performance & Relationships:

Strained relationships with suppliers often result in delayed deliveries, quality issues, and increased costs, impacting the overall supply chain.

Red Flag 3. Inconsistent Performance Metrics:

Absence or inconsistency in tracking key performance indicators (KPIs) can hinder the team's ability to gauge progress or identify areas needing improvement.

Red Flag 4. High Error Rates:

Frequent errors in orders, invoices, or contracts may signal inadequate processes or lack of attention to detail, which can lead to financial losses or compliance issues.

Red Flag 5. Lack of Effective Negotiation Skills:

Inadequate negotiation abilities impacting the team's ability to secure favorable terms, leading to missed opportunities and suboptimal agreements. As a matter of fact, Negotiations is one of the most-in-demand in-house training we do for many of our clients.

Red Flag 6. Technology Gaps or Outdated Systems:

Still using excel? While excel has its uses, many are over-using it and this is one of the failures to adapt to modern procurement technology tools.

Another failure is still relying on outdated systems which can impede efficiency, leading to missed opportunities and increased operational costs.

Red Flag 7. Resistance to Change or Innovation:

Averse attitudes toward embracing new strategies, technologies, or industry best practices. And let's not confuse “using ChatGPT to give strategies to negotiate with suppliers”, as changing or innovating - it's much more than that.

Here’s what to do instead to ‘grab the bull by the horn”!

1. Reassess and Refine Processes:

Conduct a comprehensive review of existing procurement processes. Identify bottlenecks, inefficiencies, and areas for improvement. Streamline workflows and implement best practices to enhance operational efficiency.

2. Empower with Training and Development:

Invest in continuous learning for your team. Equip them with updated skills, certifications, and industry knowledge. This investment not only enhances individual capabilities but also boosts the team's collective competence, motivation and drive to excel.

And yes, we’re here to help with any procurement related trainings – see at the end for more details.?

3. Focus on Supplier Performance:

Most of the programs are built around Supplier Relationship Management (SRM) than Supplier Performance Management (SPM). However, the moment focus changes from Relationship to Performance, SLAs, KPIs, Contractual obligations get attention and things get done.

4. Utilize Technology and Automation:

Implement modern procurement software and tools to automate repetitive tasks, enhance data accuracy, and streamline processes. Technology adoption improves efficiency and frees up time for strategic decision-making.

5. Invest in Real-Life Negotiation Skills Development:

Conduct specialized training or workshops focused on role-plays, not just principles and theory. ?Encouraging real-life negotiation simulations will significantly improve your team's ability to negotiate effectively.

6. Set Clear Goals and KPIs:

Define clear and measurable goals aligned with organizational objectives. Establish Key Performance Indicators (KPIs) to track progress and ensure accountability within the team.

7. Leadership Guidance and Support:

Strong leadership plays a pivotal role. Provide guidance, mentorship, and support to the team. Inspire them with a shared vision, motivate through challenges, and lead by example.

Implementing these strategies requires dedication and commitment, but they can significantly transform a struggling procurement team into a high-performing unit.

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If you're looking to upskill your team: Download our Procurement Trainings Catalog Here!

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